News The United States Senate passed a bill that could...

The United States Senate passed a bill that could ban Chinese companies from listing on the Stock Exchange

Trade tension between the US and China is growing (REUTERS / Yuri Gripas)

The United States Senate approved a bill Wednesday that could exclude Chinese companies from the US Stock Exchange. The legislation could also prohibit those companies from collecting money from US investors without complying with Washington’s regulatory and auditing standards.

The bill, pushed by the Republican senator from Louisiana John Kennedy, and that it had the co-sponsorship of the Democratic senator Chris Van Hollen (Maryland) and the republican senator Kevin Cramer (North Dakota), requires companies to certify that “they are not owned or controlled by a foreign government.”

Further, they would be required to undergo an audit that can be reviewed by the Accounting Oversight Board of Public Companies, the body that oversees audits of all companies in the United States.

Although this legislation, which was unanimously approved, applies to any foreign company, US lawmakers say it mainly targets Chinese companies, amid tensions between Washington and Beijing.

“I don’t want to enter a new cold war”Kennedy said in the Senate. “All I want, and I think everyone else wants, is for China to abide by the rules.”

Republican Senator John Kennedy assured that the Chinese Communist Party “cheats” (Caroline Brehman / Pool via REUTERS)

This Tuesday, in dialogue with Fox Business Network, the White House economic adviser, Larry kudlowHe expressed support for tighter supervision of Chinese companies: “We have to protect investors and protect national security. Many of these companies, by the way, have already had scandals and cost investors a lot of money, because they were not transparent in their reports. The Chinese government prohibits that kind of transparency. “

“The Chinese Communist Party cheats, and the Foreign Business Liability Act would prevent them from cheating on the US stock exchanges (…) We cannot let foreign threats to Americans’ retirement funds take root in our bags, ”Kennedy wrote on her Twitter account Tuesday afternoon, hours before the vote in the Senate.

“Hopefully this is a wake-up call to China to bring it into compliance with the rest of the world and allow transparency in the audits of its companies,” he added. Clete Willems, a former business adviser to the Trump administration and partner of Akin Gump, on CNBC.

China has refused to allow its companies to follow US securities law, arguing that Chinese law prohibits auditors’ work from being transferred outside the country, recalled Steve Dickinson of Harris Bricken. “Put more directly, unlike companies in the United States and Europe, and anywhere else in the world, Chinese companies listed on the US stock exchanges are exempt from significant financial oversight,” he said. lawyer.

In 2019, some 165 Chinese companies were listed on the U.S. Stock Exchange, including Alibaba, the e-commerce giant, which saw its shares drop 2%.

Following passage in the Senate, the bill will now go to the Democrat-controlled House of Representatives before reaching President Trump’s desk for enactment.

MORE ABOUT THIS TOPIC:

China made billions of dollars in loans to poor countries that can no longer pay: what will happen to those debts

Trump: “It was China’s incompetence and nothing else that caused this massive world slaughter”

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